1 ecommerce & distribution if you build it they will come?
TRANSCRIPT
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eCommerce & Distribution
If you build itThey will come?
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eCommerceBig or Small
• Idea – Product or Service• Revenue Model• Financing• Infrastructure
– Hardware, software, people
• Sales, Traffic, etc.
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Case Study
If you build itThey will come?
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The Idea
• Provide warehousing & distribution services
• IT consulting
• Call center operations
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Services – Distribution
• Fully automated warehouse– Individualized warehousing – shared infrastructure
• In by 8pm, delivered by 3pm• Automated inventory control
– Auto ordering– Auto trending
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Services – IT Consulting
• Custom backend interfacing– Integration with ERP & legacy systems
• Credit card authorization
• Timely inventory/sales reports – 12 hours
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Services – Customer Call Center
• Personalized 800 numbers
• Trained customer product reps
• 24/7 call support
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The Revenue Model• Initial Consulting Services• Transactions: – pay as you go
– Call Center – per call charge– Distribution – per item shipped
• Shipping & Handling • Warehousing
– charge for slow moving items– Inventory turn - 6 times a year
• Marketing Information – resell trending & customer profiling
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The Client
• Brick and Mortar Retailers
• Traditional Catalogers
• Internet Retailers
• Ideal – uniformed merchandize
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Clients
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Client's Costs & Returns
• Initial setup cost ± $1,000,000– Custom IT distribution– Call Center– Fully inventoried warehouse
• Returns – medium store
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Venture Capital
Barksdale Partners
Silver Lake Partners
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Venture Capital
• The Good– Cash Flow
• Ability to build infrastructure, hire people, market services and product – public relations
– Customer Contacts – networks – Experienced Managers
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Venture Capital
• The Bad– Limits on control of company– Multiple management layers– Contacts – consultants
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Venture Capital
• The Ugly– Demands on speedy returns 3 to 5 years– Founders forced out – Squeeze on work force to cut costs
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What Happen?• Too Much Money – $400 Million
• Too big of an infrastructure: $100 million– Expensive warehousing, IT equipment
• Client’s sales expectations– Client’s reality – medium store in sales
• Services not split– Call centers +, IT consulting +, Distribution -
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What Happen?• Limited balance sheet – burn rate: 500K
month
• Need for more money
• New clients scared of balance sheet – 6 months
• Reluctant to expand services – front end design work
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Potential Clients
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Competition
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Contact Information:Paul FrenkenPresidentColumbus Association of Internet Professionals [email protected]
www.colaip.org
Questions?